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To survive, companies need a conscience

It’s time for Japanese companies to review their profit-driven culture and think about the meaning of being truly accepted by consumers and society, according to a public policy expert and former vice governor of Tokyo.

“Japan’s corporate culture is at a crossroads,” said Yasushi Aoyama, a professor of public policy at Meiji University’s Graduate School of Governance Studies, referring to scandals ranging from tainted and expired foods to faked quake-safety data by architect Hidetsugu Aneha. “It is time for Japanese businessmen to learn how the private sector should be involved in the public good.”

This summer, Aoyama is spearheading Meiji University’s first attempt to bring Boston College’s renowned program on corporate social responsibility, known as CSR, to Japan, and the university is now accepting applications.

It will be Japan’s first executive CSR education program, and participants in the five-day course in Tokyo, which will be conducted in English, will earn a Certificate in Corporate Community Involvement from Boston College’s Carroll School of Management.

CSR is a concept whereby businesses consider the interests of society by taking responsibility for the impact of their activities on stakeholders — including customers, employees and communities — and the environment.

“Companies should realize that if the concept of CSR is missing from management, such companies will lose consumer confidence and will not be sustainable,” Aoyama said in a recent interview.

In the past few years, corporate Japan has been embroiled in scandals, with many firms quickly falling from public favor.

Confectioner Akafuku Co. was caught using expired ingredients in its sweets, a misdeed it was later revealed that other firms in the industry engaged in. The language school giant Nova Corp. misled its clients and failed to pay its employees, drawing a business suspension leading to its failure. Nursing-care firm Comsn Inc. meanwhile was punished, and ultimately folded, because it had filed fictitious license applications.

“It’s possible for a company’s stock to become mere paper in a day if it (sidesteps) regulatory compliance and CSR,” said Aoyama, who served as vice governor during the first four years of Tokyo Gov. Shintaro Ishihara’s administration.

Mizuho Financial Group, Toyota Motor Corp. and Sony Corp. are among Japanese corporations that heavily support volunteer activities in the U.S., but many are not as active in Japan, Aoyama said.

For example, many Japanese firms are high on the donation list of Common Ground Community, a New York-based nonprofit group that helps homeless people, he said.

Recalling his own experience in asking companies for donations for disaster relief in Japan, Aoyama said some were willing to offer money, but they always asked that their names not be publicized, fearing other citizens’ groups would start pestering them for donations.

As vice governor, Aoyama dealt with the evacuation of Miyake Island and knows what should be done by the government and what should be done by the private sector in times of disaster.

In 2000, all 3,800 residents of Miyake, an island in the Izu chain some 200 km south of the capital, were forced to leave due to volcanic activity. They were moved into public housing in various parts of Tokyo.

“In the U.S., the power of local governments is weak, while the financial power of citizens’ groups is strong, thanks to donations from companies,” Aoyama said, adding that donors get tax breaks. “But in the case of Japan, it is the opposite.”

As a successful example of the public and private sectors extending different types of help, Aoyama points to when the private sector reached out to the Miyake evacuees.

A collection of companies, unions, cooperatives and religious groups chartered 100 buses and took the islanders to various places, including top-notch restaurants served by famous chefs. It was all organized and funded by the private sector.

“It wasn’t that the Tokyo Metropolitan Government didn’t have money, since it could spend ¥70 billion for erosion control work on the island,” he said. “But such a trip could not be successful if it was carried out by the government, as people in the private sector are much more skilled in addressing the stress and other psychological problems people faced.”

Big business organizations, including the Japan Business Federation (Nippon Keidanren), have become aware of CSR in recent years and are promoting the concept, but it has yet to become a big wave that directly influences corporate actions, Aoyama said.

“I hope people who can act and influence corporate actions regardless of their titles will take the upcoming program and understand the concept of CSR,” he said.